The People's Bank of China (PBOC) announced the news measures in its official blog, according to Reuters, and came after markets in China had closed for the trading day. By cutting the rates to banks, the PBOC hopes that more money will flow into the economy.

It forms part of its standing lending facility, or SLF, and comes after six benchmark rates cuts by the PBOC in the last twelve months.

The world's second-largest economy is coming to terms with slowing growth after an economic boom that has lasted three decades.

The government is aiming to make China more consumption-led and domestically focused after years of relying on cash from exports. After a period of double-digit growth, projections are that the economy will grow around 7 percent this year.